It Still Happens: Damaged Claims Fail to Mention Carmack Amendment

Kevin Anderson Cargo Liability, Transportation

One of the most common occurrences in transportation law related litigation is for a complaint alleging damaged or lost goods to fail to mention the Carmack Amendment. This happens for a number of reasons, and can work in favor of carriers facing lawsuits over lost or stolen goods.

The biggest reason that lawsuits fail to include a claim under the Carmack Amendment is because it is relatively unknown in the legal world. During law school a law student will not learn about the Carmack Amendment, but will learn about other legal principles that should apply in most cases. Those include breach of contract, negligence, bailment, and other laws which typically would apply when goods are lost or get damaged.

The problem with these legal principles when applied to the trucking industry is the fact that they are state-based. True, the principles are generally the same across state lines, but each state has its own set of rules and court opinions which define how the principles are applied, and that is why the Carmack Amendment was implemented by Congress in the last century.

Purpose of the Carmack Amendment

The purpose of the Carmack Amendment is to establish a uniform system of liability for the loss and damage of goods of state lines. This purpose has two benefits. First, it provides carriers with a stable, uniform, and predictable system they can count on in measuring liability for shipping goods. And second, it protects shippers by providing them with an insurance policy where they don’t have to worry about their goods after they surrender them to shipping companies.

The problem, as far as litigation goes, is that many of the lawyers chosen by shippers to take on a case over lost or damaged goods do not know about the Carmack Amendment. This creates a situation where a shipper will go to a lawyer after losing their goods and the natural choice is to sue for breach of contract or negligence. But those state-based claims are preempted by the Carmack Amendment.

Court Adjusts Claims

This is what happened recently in a federal case over the damages caused to a meat injector worth over $100,000. It was billed to be shipped from New Jersey to Louisiana, but was allegedly damaged along the way. The shipper sued for breach of contract and negligence, when the obvious claim should have been under the Carmack Amendment. As a result of this, the defendant carrier asked that the case be dismissed as preempted by the Carmack Amendment.

Fortunately for the shipper in this case, the judge allowed the pleading to be read as a Carmack Amendment claim, and granted leave to amend it. But this does not always happen, and many times it can work to the shipper’s advantage where the court will dismiss a complaint that fails to mention the Carmack Amendment. That is when it is important to have the right legal team defending you against a claim, and you have the best chance of getting a favorable ruling.

At Anderson and Yamada, we have decades of experience handling these and other transportation law issues. If you are facing legal problems associated with transportation law, contact us today.